R48.7 billion taxpayer-funded entity fails to submit financials on time

South Africa’s R48.7 billion National Student Financial Aid Scheme (NSFAS) has missed its deadlines to submit the 2024/25 annual report and audited financial statements.

In a letter to Parliament’s speaker last month, Higher Education Minister Buti Manamela revealed that NSFAS would once again be unable to meet the statutory submission deadline of 30 September.

According to provisions of the Public Finance Management Act, these reports need to be submitted in the legislature within six months of the financial year-end, which was 31 March.

However, “NSFAS will be in the position to submit their Annual Report and Audited Financial Statements once their audit process has been concluded, with the anticipated date of 07 November 2025,” wrote Manamela.

The delays are attributed to a legacy issue inherited by the current management and board.

At a Standing Committee on Appropriations (SCOA) meeting on 21 October, acting NSFAS CEO Waseem Carrim said the organisation has historically submitted unaudited financial statements around December, well after the legislative deadline of 31 May.

When the current leadership was appointed on 1 February 2025, they were tasked with catching up on prior years’ reporting.

The included finalising the 2023/24 financial statements and performance report, which have now been tabled in Parliament.

However, the 2024/25 unaudited financial statements were submitted two months late, on 31 July 2025.

The Auditor-General is currently concluding the audit, and the annual report is expected to be tabled by November.

Members of SCOA have emphasised accountability, noting that when a private listed entity fails to submit audited statements, it faces fines, trading suspension, potential delisting, and directors may incur personal liability.

Kingsley Wakelin of the Democratic Alliance (DA) expressed concern over repeated delays in NSFAS’s annual audited financial statements.

Speaking to Newsday, he warned that the situation “will hinder planning for students, institutions, and government partners” and erode public trust, while complicating audits and compliance.

“We however are hopeful with the new Acting CEO in place and his commitment to us to clear the backlog on the financial statement by 7th Nov 2025.”

“He also gave us the assurance that the following financial statement will be submitted in time.”

Roughly 100,000 eligible students at risk of exclusion

NSFAS provides bursaries and loans to low-income students at public universities and TVET colleges, covering tuition, accommodation, living allowances, and books.

While the scheme has supported millions since its inception, it faces significant operational and systemic challenges.

This includes delays in disbursements, limited administrative and ICT capacity, high loan non-repayment, oversubscription, and issues of corruption, mismanagement, and underfunding.

University enrolments rose roughly 10% year-on-year, but budget allocations increased only marginally over the same period.

Expenditure grew from R38 billion in 2023 to R49.3 billion in 2025, resulting in deficits of R2.3 billion in 2023, R5 billion in 2024, and nearly R11 billion in 2025.

To mitigate these shortfalls, Carrim explained that NSFAS had taken various steps.

This includes reprioritising funds, drawn on recoveries from the Special Investigating Unit (SIU) and the National Skills Fund, applied prior surpluses, and utilised a Department contribution for living allowances.

Despite these measures, a residual deficit of R690 million remains, ultimately borne by universities.

Cash reserves were reported per National Treasury formulas, but NSFAS warned that under the 2026 university budget, it could fund only approximately 520,000 students.

This leaves roughly 100,000 eligible students at risk of exclusion.

A multi-departmental technical team has been convened to submit recommendations to Cabinet before year-end.

Impact on students and institutions

Wakelin highlighted the unsustainability of the current model, pointing to loan collection gaps prior to December 2018, reduced transparency, and oversight risks that increase the chance of fund misallocation.

He also emphasised that cancelling student funding mid-study is “a grave matter” requiring close monitoring.

By 30 September, NSFAS had disbursed approximately R4.09 billion to around 4,600 accommodation providers, covering 127,445 students.

Defunding occurs in cases of failed academic progression or financial misrepresentation, although appeals processes are in place.

The accumulated R11 billion deficit, along with these operational pressures, underscores the ongoing risk to students and institutions alike, particularly those relying on timely funding to plan their studies and living arrangements.

Planned reforms

To prevent similar delays in future years, Carrim said reforms are being introduced to align strictly with the legislative cycle, ensuring financial statements are submitted by 31 May and audited by 31 July.

Tighter reconciliation processes with universities are also being implemented, with non-compliant institutions potentially facing measures such as withholding tuition payments to enforce compliance.

NSFAS has set a December 2025 deadline to finalise all outstanding closeout processes with universities.

The reforms are part of a broader plan to stabilise the organisation and ensure future reporting aligns with statutory requirements.

Wakelin called for systemic reforms, including a tiered loan and grant system for sustainability, decentralising administrative functions, improving oversight of student accommodation, and increasing funding for TVET college students to better align studies with private-sector needs.

Carrim said that although past years were marked by delays, the organisation is now catching up and expects next year’s financial statements to be submitted on time in line with legislative requirements.